Change

48 THE PIERRE ELLIOTT TRUDEAU FOUNDATION
ANNUAL REPORT 2015–2016
49
Cash and cash equivalents
Cash and cash equivalents consist of deposits with a major financial institution and balances in the investment portfolios.
Investments at fair value
Investments at fair value consist of short-, mid- and long-term debt securities.
Revenue recognition
Donations The Foundation follows the deferral method of accounting for donations. Restricted donations are
recognized as revenue in the year in which the related expenses are incurred. Unrestricted donations are
recognized as revenue when received or receivable if the amount to be received can be reasonably estimated
and collection is reasonably assured.
Interest Interest is recorded on an accrual basis when collection is considered probable.
Gains and losses on disposal of investments at fair value Gains and losses on disposal of investments at fair value
are recorded at the date of sale and represent the difference between the sale proceeds and the cost.
Fellowship, Scholarship and Mentorship Programs
Scholarships, fellowships and mentorships are recorded as liabilities and expensed in the year of approval. Ongoing
monitoring of the programs occurs on a continuing basis as part of an overall commitment to accountability. Since
these programs are multi-year commitments, changes in amounts committed are adjusted in the year in which
they occur.
Property and equipment
Property and equipment are stated at cost less amortization.
Amortization is provided for using the declining balance method over the estimated useful lives of the assets at the
following rates:
Office communication equipment 20%
Furniture and fixtures 20%
Computer equipment 25% to 33%
Leasehold improvements are amortized on a straight-line basis over the term of the lease.
Artwork is not amortized because the useful life is virtually unlimited.
Intangible assets
Intangible assets consist of computer software, which is recorded at cost and amortized at a rate of 20%.
Impairment of long-lived assets
The Foundation reviews, when circumstances indicate it to be necessary, the carrying values of its long-lived assets
by comparing the carrying amount of the asset or group of assets to the expected future undiscounted cash flows
to be generated by the asset or group of assets. An impairment loss is recognized when the carrying amount of an
asset or group of assets held for use exceeds the sum of the undiscounted cash flows expected from its use and
eventual disposition. The impairment loss is measured as the amount by which the asset’s carrying amount exceeds
its fair value based on quoted market prices, when available, or on the estimated current value of future cash flows.
3 Capital disclosures
As at August 31, 2016, the Foundation’s capital structure consists of a $125,000,000 endowment fund granted in
perpetuity by the Government of Canada in 2002 (note 10), internally restricted assets of $18,833,203
(2015 – $22,500,000) (note 11), net assets invested in property and equipment and intangible assets of $716,618
(2015 –$814,138) (notes 6 and 7) and unrestricted net assets of $2,548,902 (2015 – $1,673,463) (note 12).
The funding agreement with the Government of Canada on the Advanced Research in the Humanities and Human
Sciences Fund stipulates that the original endowment may not be spent, but that the income generated may be
used for the Foundation’s purposes. Accordingly, the Foundation manages its capital with the following objectives:
– preserving the original capital of the endowment;
– protecting the endowment from inflationary impacts;
– funding current and future operations;
– ensuring that the Foundation is able to meet its financial obligations as they come due; and
– safeguarding the Foundation’s ability to continue developing its programs in the long term.
4 Short-term investments
Short-term investments consist of Canadian dollar denominated treasury bonds. These investments bear interest at
floating rates between 0.47% and 0.53% and mature between September 8, 2016 and November 3, 2016 (2015 – one
bond at 0.37%; matured December 3, 2015).
5 Investments at fair value
Investments are administered by a portfolio manager in compliance with the Foundation’s investment policy and
under the direction of a Finance and Investment Committee reporting to the Board of Directors. Investments at fair
value consist of a variety of debt securities of Canadian governments and corporations rated no lower than “A” by
at least one recognized credit rating agency. However, bonds with a maturity of over five years carry an “AA” rating.
The Foundation’s investment policy is based on the guidelines included in the funding agreement with the
Government of Canada on the Advanced Research in the Humanities and Human Sciences Fund.
The allocation of investments at fair value by term is as follows:
Less than From 1 to More than
1 year 5 years 5 years Total
$ $ $ $
Fair value 1,114,893 66,018,994 79,208,161 146,342,048
Par value 1,108,000 63,120,000 72,019,000 136,247,000
Weighted average yield 1.24% 2.67% 2.19% 2.40%
Less than From 1 to More than
1 year 5 years 5 years Total
$ $ $ $
Fair value 12,172,998 60,473,718 80,801,992 153,448,708
Par value 11,850,000 57,063,000 74,936,000 143,849,000
Weighted average yield 3.12% 2.66% 2.20% 2.45%
6 Property and equipment
2016
2015
2016 2015
Accumulated
Cost amortization Net Net
$ $ $ $
Office communication equipment 42,775 26,529 16,246 20,307
Furniture and fixtures 126,936 97,101 29,835 35,933
Computer equipment 123,053 99,049 24,004 21,782
Leasehold improvements 873,058 254,642 618,416 705,722
Artwork 18,183 - 18,183 18,183
7 Intangible assets
1,184,005 477,321 706,684 801,927
2016 2015
Accumulated
Cost amortization Net Net
$ $ $ $
Computer software 62,051 52,943 9,108 11,385